Attempts to flee the country without paying credit card debts may be futile according to experts, who have warned UAE residents that outstanding balances are likely to increase even more during a period out of the country due to compound interest and a flurry of late fees.
While residents can now compare a number of affordable credit card options online, many still struggle to meet regular payments and debts can grow significantly if a person loses their job. However, experts say that fleeing is not a viable option, even if the prospect of lower costs of living elsewhere and an absence of UAE debt collectors can initially appear enticing.
Financial and legal adviser Barney Almazar believes that people with debts are often reluctant to talk to a bank about making a settlement but that this course of action is usually the best. He said that banks “welcome settlements made in good faith” as they are not interested in sending people to jail.
People who instead attempt to flee will have to put up with numerous calls from collection agencies, and the net is still likely to close in even when in other countries as these agencies have offices and subsidiaries in all four corners of the globe. The loan balance will also grow due to a litany of fees and charges, which makes the problem even worse.
“I have not encountered a situation where the bank refused any form of settlement. Even for those with existing cases, banks will still settle,” Almazar said.
He added: “However, there are instances where the negotiation will come to an impasse when the bank doesn’t accept the offer of the debtor or the debtor is not in the position to take the bank’s offer. In this situation, we recommend the intervention of the Central Bank where the debtor can ask for its assistance.”
For those who have recently lost their job or been made redundant, Almazar recommends checking the finer details of the credit card agreement. However, he noted that many people wrongly believe that the loss of a job means that they are no longer obligated to make payments to a bank.
Almazar also said that moving to another country for a certain time is not necessarily a bad thing and can help if there is the option of better paying capacity abroad but that it is crucial to keep the bank updated on any movements. A person with debts needs to show that they are sincere in attempts to repay. It is also possible to arrange payments while in another country.
It can also be tempting to take out another credit card or loan to make debt repayments, but this is not a recommended path due to the possible cycle of debt, which can lead to even more serious personal finance problems. Banks will consider payment history and earning capacity when looking to settle, and these factors will be key during any negotiations.
To conclude, rather than attempting to run away, UAE residents should instead be ready to open dialogue with banks to come up with a manageable payment plan that will be beneficial for all parties involved.
